The stock lost 21.7%, the largest percent drop since July 25, 2012 when shares fell 25%, as tracked by Dow Jones Market Data Group. Shares have fallen 33% this year, with added pressure as investors rotate out of technology names.
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The streaming giant added 8.3 million subscribers in the fourth quarter, just shy of the 8.5 million estimate. Forecasts for the current quarter also disappointed with plans to add 2.5 million vs. 4 million in the year-ago period.
Still, total subscribers, globally, hit 222 million.
"Overall, the business was healthy. Retention was strong. Churn was down. Viewing was up. But on the margin, we just -- we didn't grow acquisition quite as fast as we would have liked to see" said chief financial officer Spencer Neumann on the earnings call.
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Why the slowdown? CEO Reed Hastings said he and his team are trying to figure that out.
"There's a number of potential explanations with COVID, but then we worry about hanging too much on that. There's more competition than there's ever been. But we've had Hulu and Amazon for 14 years. So it doesn't feel like any qualitative change there. And overall, confidence in streaming becomes all of entertainment. Linear dissipates over the next 10 to 20 years. Very high confidence in that thesis because everyone's coming into streaming. So like market size, very large. Our execution is steady and getting better. So for now, we're just like staying calm and trying to figure out," he said.
Coming up, Season 2 of Bridgerton and The Adam Project will debut in March.